What is the Buy Now, Pay Later Market?

If you’ve ever wanted to make a big purchase but don’t have the funds for it, you’re not alone. It can be hard to justify dropping a large amount of money all at once, especially if you need that money to pay bills. That’s why more and more customers are taking advantage of stores and retailers that offer a “buy now, pay later” (BNPL) policy. Here’s a closer look at how the BNPL market works and whether it’s the right option for you.

What Is Buy Now, Pay Later?

Buy now, pay later (also known as purchase now, pay in future) is a flexible payment option that lets shoppers pay off purchases over a set period. It’s not always available — a company or online retailer needs to partner with a BNPL provider to offer it. While each BNPL provider has its own rules, the policy generally works like this:
  • You make a purchase and select the “buy now, pay later” option.
  • You submit your personal and payment information. Then, the company’s software will quickly check your credit before deciding if you are eligible for BNPL.
  • If you’re approved, you may be asked to submit a small down payment on the purchase (such as 25%).
  • You pay off the rest of the purchase over a certain amount of time with pre-scheduled installments. These may or may not be interest-free.
Most BNPL providers accept a number of payment options, including credit cards, bank accounts, checks and bank transfers.

What Are the Pros and Cons of BNPL?

While BNPL may sound like a no-brainer, it’s not for everybody. Before you decide to take advantage of a purchase now, pay in future policy, consider the pros and cons. Pros The main advantages of BNPL include:
  • Efficiency: BNPL is an efficient way to make purchases without having to dip heavily into your savings.
  • No extra fees: Provided you make your payments on time, you don’t have to worry about extra fees. Some providers may also not charge interest.
  • Convenience: BNPL lets you connect several different payment options. You can set it to automatically make payments, which helps ensure you don’t forget about them.
If you would rather spend a small amount of money every month than a large amount of money in one sitting, then BNPL may be for you. Before you sign up, you should be certain that you’re able to make every payment and can meet any interest rates. Cons There are some downsides to buy now, pay later policies. These include:
  • Temptation: Because the payment is split over time, it may be tempting to spend more. It’s important to remember that BNPL options do not actually save you money in the long run.
  • Poor credit score: If you miss a payment, you may have to pay a fee or higher interest rate. Moreover, missed payments are reported to credit bureaus.
  • Difficulties with refunds: Refunds are more difficult to get because you have to communicate with both the retailer and the BNPL provider.
If you’re not 100% certain that you can make all your payments, then BNPL is very risky. Credit bureaus don’t take on-time payments into account, but they do consider missed ones. Moreover, missing your payment will trigger fees, causing you to pay more money in the long run.

Where Can I Shop Using BNPL?

If you believe BNPL is a good option for you, you can start by finding a store that offers it. Some top retailers that let you buy now, pay later include:

Not sure if the store you want to shop at lets you purchase now, pay in future? Just consult this list of major retailers that offer BNPL and see if your desired store is included.

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